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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Overview of Goods and Services Tax

A practice was generally prevalent in an industry under which central tax was not levied on a class of supplies that were actually taxable. Which statement correctly describes the power under section 11A of the CGST Act, 2017?

Under section 11A, the Government, on the Council's recommendation and by notification in the Official Gazette, may direct that central tax not levied or short-levied due to a generally prevalent practice need not be paid. It covers both non-levy and short-levy.

  1. AThe proper officer may waive the tax on his own after a hearing, without any notification
  2. BThe Government may, on the Council's recommendation, notify that the tax not levied or short-levied because of that practice need not be paidCorrect
  3. CThe Appellate Tribunal may direct non-recovery for supplies made under such practice
  4. DThe Government may direct non-recovery only for tax short-levied, not for tax wholly non-levied

Explanation

Section 11A empowers the Government, if satisfied that a practice was or is generally prevalent and the supplies were liable to tax (or higher tax), to notify on the Council's recommendation that the tax need not be paid. It covers both non-levy and short-levy, and needs a notification, so the other options are wrong.

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